Johannesburg, 1 March 2018 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the continued improvement in overall business activity in the manufacturing sector as reflected in the ABSA Purchasing Managers’ Index, SEIFSA Economist Marique Kruger said.
The data showed that the PMI improved from 49.9 percent in January 2018 to 50.8 percent in February 2018. This is the first time since May 2017 that the indicator trended above the neutral level of 50, which is very encouraging for companies in the metals and engineering (M&E) sector.
“The PMI is an important lead indicator that sets the tone for how producers and relevant stakeholders in the manufacturing sector view the month ahead. The performance of the index can partly be attributed to improved business confidence in light of the growing optimism and business confidence following recent political developments in the country,” Ms Kruger said.
In terms of the various sub-indices, the strongest performer was the new sales orders sub-index registering 52.7 percent in February 2018, from 50.4 in January 2018, while the weakest performer was the inventories sub-index registering 44.9 percent in February 2018, from 47.3 percent in January 2018.
Ms Kruger said the Federation’s expectation is that next month’s data for the composite PMI indicator could improve further, provided that business confidence continues its positive trajectory.
Ms Kruger said SEIFSA was also hopeful that businesses in the M&E sector would take advantage of the general buoyancy, improving business prospects and positive expectations to increase production.